business plan[1].pdf

7/27/2019 Business Plan[1].pdf

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BUSINESS PLAN

Format

EXECUTIVE SUMMARY

1. Brief Description of the Project2. Brief Profile of the Entrepreneur3. Projects Contributions to the Economy

Section I

MARKETING PLAN

1.1 Description of the Product1.2 Comparison of the Product with Its Competitors1.3 Location1.4 Market Area1.5 Main Customers1.6 Total Demand1.7 Market Share1.8 Selling Price1.9 Sales Forecast1.10 Promotional Measures1.11 Marketing Strategy1.12 Marketing Budget

Section 2

PRODUCTION PLAN

2.1 Production Process

2.2 Fixed Capital2.3 Life of Fixed Capital2.4 Maintenance and Repairs2.5 Sources of Equipment2.6 Planned Capacity2.7 Future Capacity2.8 Terms and Conditions of Purchase of Equipment


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2.9 Factory Location and Layout2.10 Raw Materials2.11 Cost of Raw Materials2.12 Raw Materials Availability2.13 Labour2.14 Cost of Labour2.15 Labour Availability2.16 Labour Productivity2.17 Factory Overhead Expenses2.18 Production Cost

Section 3

ORGANIZATION AND MANAGEMENT PLAN

3.1 Form of Business3.2 Organizational Structure3.3 Business Experience and Qualifications of the Entrepreneur3.4 Pre-Operating Activities3.5 Pre-Operating Expenses3.6 Office Equipment3.7 Administrative Expenses

Section 4

FINANCIAL PLAN

4.1 Project Cost4.2 Financing Plan and Loan Requirement4.3 Security for Loan4.4 Profit and Loss Statement4.5 Cash Flow Statement4.6 Balance Sheet

4.7 Loan Repayment Schedule4.8 Break-even Point (BEP)4.9 Return on Investment (ROI)4.10 Financial Analysis


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BUSINESS PLAN

Guide Questions

EXECUTIVE SUMMARY

1. What is the nature of the project?2. What are the entrepreneurs competencies and qualifications?3. What are the projects contributions to the local and national economy?

Section 1

MARKETING PLAN

1.1 What is the product?1.2 How does it compare in quality and price with its competitors?1.3 Where will be the business be located?1.4 What geographical areas will be covered by the project?1.5 Within the market area, to whom will the business sell its products?1.6 Is it possible to estimate how much of the product is currently being

sold?1.7 What share or percent of this market can be captured by the

business?1.8 What is the selling price of the product?1.9 How much of the product will be sold?1.10 What promotional measures will be used to sell the product?1.11 What marketing strategy is needed to ensure that sales forecasts are

achieved?1.12 How much do you need to promote and distribute your product?


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Section 2

PRODUCTION PLAN

2.1 What is the production process?2.2 What buildings and machinery (fixed assets) are needed and what

will be their cost?2.3 What is the useful life of the building and machinery?2.4 How will maintenance be done and are spare parts available locally?2.5 When and where can the machinery be obtained?2.6 How much capacity will be used?2.7 What are the plans for using spare capacity?2.8 When and how will the machinery be paid for?

2.9 Where will the factory be located and how will the factory bearranged?

2.10 How much raw materials are required?2.11 How much will the raw materials cost?2.12 What are the sources of raw materials? Are they available

throughout the year?2.13 How many direct and indirect labour are needed and what skills

should they have?2.14 What will be the cost of labour?2.15 Are workers available throughout the year? If not, what effect will this

have on production?2.16 How will the workers be motivated?2.17 What factory overhead expenses are involved?2.18 What is the production cost per unit?

Section 3

ORGANIZATION AND MANAGEMENT PLAN

3.1 How will the business be organized?3.2 How will the business be managed and operated?3.3 What is the business experience and qualifications of the

entrepreneur?3.4 What pre-operating activities must be undertaken before the business

can operate?3.5 What pre-operating expenses will be incurred?


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3.6 What fixed assets will be required for the office?3.7 What administrative cost will be incurred?

Section 4

FINANCIAL PLAN

4.1 What is the total capital requirement?4.2 Is a loan needed? What will be the equity contribution of the

entrepreneur? And how much?4.3 What security (collateral) can be given to the bank?4.4 What does the Profit and Loss Statement indicate?4.5 What does the Cash Flow Statement indicate?4.6 What does the Balance Sheet indicate?

4.7 What is the loan repayment schedule?4.8 What is the break-even point (BEP)?4.9 What is the return of investment (ROI)?4.10 Is the project feasible?


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PUTTING UP MY OWN BUSINESS

I. How shall I start?

IDEATION should be the first investment of anybody who seeks to be anentrepreneur. Indeed, it maybe said that business starts and proceedswith the process of ideation, of thinking things through carefully, of askingvery fundamental questions and giving the clearest answers to them, offormulating alternative plans, and of organizing ideas so that they can beeasily translated into effective action.

II. What business should I be in?

A. Personal Considerations

The fundamental and long lasting basis for going into a business is delight in it. Ithas to be something you enjoy. It should give you the chance to deal with peopleyou generally like dealing with. It should afford you the chance to do things youhave always wanted to do, as well as go to places you like being in. It mustchallenge your creativity and entrepreneurship ability. Most important, it mustlead to self-development, or the development of certain desirable humanqualities that are latent within you. Another starting point for business would bethe talents that you possess. Is it knowledge in Handicrafts? Public relation?Selling? Tinkering with machines? Garments or woodworking?

Yet another would be your training or previous working experience. This seemsto be easiest route for some people to go into business that will make themcompete in one way or another with companies they used to work for. They startwith clients, products, or supplies they may pirate from their previous job. Butthese are those who approach the transition more professionally or as otherswould bluntly put it, more ethically they go into services, or products thatcomplement their previous employment, acting as subcontractors or as suppliersof some of their product components or product lines.

Your choice of business would also depend on a few other essentialconsiderations especially as to what sort of objectives you really have in starting

your own business. Is it to learn what you would if you were employed on a fulltime basis? Is it to supplement your income? Is it to gamble? Is it to employyour relatives? Is it to pursue a hobby? Is it to get very rich? Is it to be of serviceto your fellowmen? Whatever your objective maybe, you are entitled to them. Besure, however, that they are realistic and rational objectives. They must servethe social good.


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B. External Considerations

One is: what businesses are being encouraged and supported by thegovernment? They may be provided some tax breaks, special financing

programs, or marketing support. These business are what the governmentconsiders to be important for our countrys development. They are oftendescribed by all or any of the following objectives export-oriented,employment-generating or labor intensive, small and medium scale industrieswhose products are meant primarily for markets abroad, but that are also labor-intensive in technology, are highly favored.

Another factor with worth considering is the rate of growth of various businessesat various stages of the countrys development. What businesses will be growingfaster than others in the next ten years? In other words, what businesses shouldFilipino entrepreneurs organize that would further aid and hasten the countrys

development.

Engineering industries are among those likely to be mentioned ahead of others.They are involved in the transformation of metal and its by-products into suchitems as nuts and bolts, ships, machinery, and even automobiles and aircraft.

And in the light or worsening energy crisis, all sorts of energy developmentprojects and businesses are likely to be not only rapidly growing, but also highlysupported by the government.

III. What is the appropriate bus iness scale?

J ust how much should be invested in my business?

It is true that whatever amount you have in your hands determines the size ofoperation you should put up. It is usually better to ask the question independentof your financial means. There is, after all, such a thing as the appropriate sizeof a business.

One stop you can take is to investigate the business you have selected. Look atthe more successful firms in it? Of what particular scale are the more successfulones? Or does scale really matter in that type of business? Even if the biggerfirms are relatively more successful you may find small firms that are still viablebecause they may specialize in certain segments of the markets. Since you areat it already, make a mental note of the secrets of success of particular firms inthat business. You have just started to get acquainted with your futurecompetitors, too.


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It is no longer fashionable to immediately think Big. Business failures in the pasthave shown investors that having too grandiose a plan in their hands can bedangerous. Where things can be done on a smaller scale and still yield efficientand profitable results, more investors are just as attracted as they would be topromises of bigness. The cry small is beautiful has grown so popular that it is

almost part of every investors routine now to start thinking small before thinkingbig.

In the final analysis, the scale of business that you wish to go into also dependson your personal expectations. What level of sales do you want to achieve?What sort of profits do you wish to generate?

IV. How shall I organize business?

1. Choosing the Legal form

There are advantages and disadvantages that go with any legal form ofbusiness, be it a single proprietorship, a partnership or a corporation. Thesepros and cons to each business form may fall under any of the followingcategories: ease in starting, professionalism in actual operation, decisionmaking, growth potential, lifespan, distribution of liabilities and legal burdens.

Table 1 below summarizes the major pros and cons that are attached to eachlegal form of business. These are not the real determinants of what form thebusiness should take, however, they just set down certain comparativecharacteristics that can help the businessman simplify his selection.

TABLE 1 : ALTERNATIVE FORMS OF BUSINESS

ADVANTAGES DISADVANTAGES

A. Single Proprietorship(one party)

1. Easy to set up2. Decision making left

entirely to owner

1. Demanding on ownerspersonal time

2. Growth limited byowners financial means

B. Partnership (at least twoparties)

1. Relatively easy to set up2. Check and balance

maintained with twoparties around

1. Any personal riftsbetween partners maydissolve partnership

2. Equal profit sharingdespite unequalattention and time givenby partners to business


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5. Registration of New Business

Before the business of doing business is tackled the following official stepshave to be taken:

- Registration of Business name with the Department of Trade and Industry- Application for Mayors Permit to operate within the chosen locality and

securing of Municipal License- Registration with Securities and Exchange Commission (SEC) of Articles of

Incorporation and By-Laws for all corporations and for partnership.- Registration with the Bureau of Internal Revenue to obtain a Tax Identification

Number (TIN)- Registration of employees with the Social Security System (SSS) Medicare

and so on.

business plan[1].pdf

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